Westlife Foodworld Limited

Consumer Cyclical — Restaurants · NSE

₹573.75+₹0.15 (+0.03%)

DalalBaazaar Score

33 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Westlife Foodworld Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Westlife Foodworld Limited, through its subsidiary, Hardcastle Restaurants Private Limited, owns and operates a chain of McDonald's restaurants in Western and Southern India.

IndustryRestaurants

SectorConsumer Cyclical

Employees10,473

Annual revenue₹2,600 Cr

How does it make money?

Turns over ₹2,600 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 10,473 employees supports ₹24.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹24.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

What is the outlook?

16 analysts covering the stock expect revenue to grow about 14.1% and earnings to grow about 176.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.1%

Est. earnings growth+176.4%

Analysts16

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +15% while net margin moved -75% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+15%

Margin effect-75%

DalalBaazaar Score

33/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ P/E of 281.3x is demanding — it needs sustained high growth to justify
✗ P/E is 64% above its own historical median of 171.2x — expensive by its own standards
✗ P/B of 14.67x is a steep premium to book

Quality vs. Valuation

Company Quality

33/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

23/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

281.3x

3Y Median

171.2x

40 monthly readings · mean 322.8x · range 104.6x–920.6x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 64% above its 3y median of 171.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 306% above the peer median of 69.2x.

vs. its own history

Expensive

171.2x median over 40 months · +64%

vs. sector peers

Expensive

69.2x median of 4 peers · +306%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

29.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 46% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 19.7% to 5.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.3% to 9.0% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 50% over 3 years, from ₹1,203 Cr to ₹1,805 Cr.
🔴High leverageFinancial
Debt/Equity of 2.92x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.3x — little room if earnings dip.
🟡Profit is decliningFinancial
Net profit is down 71% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 61% against revenue up 15% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.32 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 17.5% to 14.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 61% against revenue up 15%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 64% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 4.8% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 14.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.3x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 4.8% CAGR
Latest reported year was 11.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹115 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹8,906 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

281.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

14.67x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹2.04

Profitable

Profitable on a per-share basis

ROE

5.2%

Weak

Weak capital efficiency

ROCE

9.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.92x

High

High leverage

Revenue Growth (YoY)

11.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-50.0%

Falling

Profits are shrinking

Dividend Yield

0.14%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹115 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

108.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

4.5%

Weak

Thin margins leave little room for error

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.32

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.02

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

582.9 / 574.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,259 Cr	₹2,368 Cr	₹2,474 Cr	₹2,600 Cr	+4.8%
EBITDA	₹395 Cr	₹385 Cr	₹343 Cr	₹363 Cr	-2.7%
EBITDA Margin	17.5%	16.3%	13.9%	14.0%	—
PAT (Net Profit)	₹112 Cr	₹69 Cr	₹12 Cr	₹32 Cr	-33.8%
EPS	₹7.16	₹4.44	₹0.78	₹2.07	-33.9%
ROE	19.7%	11.8%	2.0%	5.2%	—
ROCE	16.3%	12.0%	7.3%	9.0%	—
Total Debt	₹1,203 Cr	₹1,363 Cr	₹1,623 Cr	₹1,805 Cr	+14.5%
Free Cash Flow	₹79 Cr	₹123 Cr	₹127 Cr	₹115 Cr	+13.5%

🟢 Revenue has grown at 4.8% a year over 3 years.

🔴 EBITDA has shrunk at 2.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.5% to 14.0% over 3 years (-3.5 pts).

🔴 PAT (Net Profit) has shrunk at 33.8% a year over 3 years.

🔴 EPS has shrunk at 33.9% a year over 3 years.

🔴 ROE has fallen from 19.7% to 5.2% over 3 years (-14.5 pts).

🔴 ROCE has fallen from 16.3% to 9.0% over 3 years (-7.3 pts).

🔴 Total Debt has grown at 14.5% a year over 3 years.

🟢 Free Cash Flow has grown at 13.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,830 Cr

Total Liabilities

₹2,211 Cr

Cash & Equivalents

₹16 Cr

Operating Cash Flow

₹352 Cr

Capex

-₹236 Cr

Shareholding (proxy)

Institutional Holding

30.6%

Insider Holding

63.6%

Corporate Actions

Dividend Rate

₹0.8

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

12 Buy · 4 Hold · 4 Sell

Target Price (Mean)

₹563.15

-1.8% vs CMP

Target Range

₹450 – ₹730

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 positive4 mixed1 general

Westlife Foodworld Share Price rises 6.93% with valuation

Univest, 23 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Positive earnings growth hasn't been enough to get Westlife Foodworld (NSE:WESTLIFE) shareholders a favorable return over the last year

Simply Wall Street, 06 FebResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

McDonald’s India Launches Spicy Patakha Range; Westlife Shares Rise 0.61%

HDFC Sky, 12 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Westlife Foodworld Shares In Focus As Brokerages Mixed Despite Q4 Profit Surge — Check Target Price

NDTV Profit, 08 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Westlife Foodworld launches Spicy Patakha Range for McDonald's West and South

scanx.trade, 12 Oct

QSR stocks: Devyani up 9% despite wider Q3 loss; Westlife Foodworld jumps 11% post-Dec quarter results;...

Moneycontrol.com, 05 FebResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑